There are more than one million orthopaedic operations performed each year in the United States, which require bone healing and repair. Developing a new, effective method to enhance bone healing and repair may directly impact clinical outcomes. Such a method can avoid invasive procedures for harvesting bone graft and can also address other problems of bone grafting, such as failure of complete resorption of the grafted bone, difficulty in shaping the bone graft to completely fill the defect, and lack of sufficient bone graft substance for large and extensive bone defects in the clinic. Previous studies showed that implantation of autologous bone marrow derived mesenchymal stem cells (MSC) generates bone formation in vivo. We further demonstrated that bone morphogenetic protein-2 (BMP-2) gene transfer in MSC enhances bone formation compared to autologous implantation of MSC alone. Recent evidence demonstrated that allogeneic bone marrow transplantation into children with severe osteogenesis imperfecta enhances bone formation, which resulted from engraftment of allogeneic MSC and that implantation of allogeneic marrow soaked porous hydroxyapatite ceramics leads to histological bone formation in rats. Thus, we hypothesize that in conjunction with the short term administration of the immunosuppressant, BMP-2 gene transferred allogeneic MSC can survive for a period of time following implantation into bone defect sites of non-ablated recipients. These MSC can overexpress BMP-2 protein for a period of time in situ, which induces both implanted allogeneic MSC and host mesenchymal progenitor cells to express bone matrixes and to form bone. Our aims are:1. To investigate the repair of femur defects in non-ablated rats with BMP-2 gene transferred allogeneic MSC for repair.2. To investigate the fate of implanted allogeneic MSC in femur defect site of non-ablated rats. The ultimate goal of this proposal is to develop percutaneous injection procedure to facilitate bone repair.